E-moneys institutions are companies in charge of providing services related to electronic money. They differ from a bank in that they do not have the capacity to grant credit or generate interest from deposits made. 

Currently, they have become a trend in the Fintech world as they are companies with fewer regulations both for those who create them and for those who use their services. 

In the United Kingdom there is the possibility of obtaining a license to create this type of company. The procedure lasts for 12 months and the initial amount to create the company is £350,000. 

Types of E-Money Institution

There are currently two types of E-Money Institution in the UK: SEMI and AEMI. 

SEMIs are those with a turnover of less than £3 million per month. Moreover, their range of operations is limited only within the UK. 

On the other hand, AEMIs can have a turnover exceeding £3 million per month. And their range of operations can be made inside and outside UK territory.

What Types of Services Can an E-Money Institution Offer in the UK?

We have mentioned that E-Money Institutions can be similar to banks. Only that they do not offer credit or interest. However, they can perform the following operations: 

-Make deposits and withdrawals of money in payment accounts. Both electronically and in cash. 

-Payment transactions such as direct debits, credit or debit card payments and transfers. 

-Payment operations when they have a credit line for payment services users. 

-Issuance of payment instruments (credit or debit cards).

-Money remittances. 

-Opening of accounts with bank identification (SWIFT and IBAN code). 

-SEPA accounts (authorization to make transfers to European accounts).

Benefits of an E-Money Institution in the UK 

In addition to having a business-friendly environment where there is legal certainty and economic freedom, the United Kingdom offers a series of advantages for EMIs. Among them we can mention:

-VAT is exempted for EMIs. However, VAT is set at 20% for almost all goods and services. 

-The ability to have an AML department. This will ensure that your services provided with your company are not being used for money laundering. 

-EMIs have no regulations as to the amount of business they can engage in. 

-Less oversight or regulation than a bank. 

-The UK ranks second in the Global Fintech ranking. You will be in an innovative environment and ready to grow your business. 

Where to Register your EMI license? 

The FCA is the authority in the UK in charge of registering your license to create an EMI. By approving with the FCA you will be assured of a high standard of certification. This will give your company hierarchy. 

The procedure takes about 3 to 12 months. This will depend on whether the amount of information you have registered or submitted to the FCA is what they need.

Requirements to Obtain the License

You must have and submit the following:

-Articles of Incorporation 

-Company's operations program

-Business plan. In it you must detail your financial planning, which must be designed in a period of 3 years where you can demonstrate and develop the solidity and efficiency in the management of the resources with which you will operate your company. 

-Proof that the amount of capital stock will not be less than the amount required by the authority. 

-Plan of measures to guarantee the safekeeping of the deposits of the holders of the electronic money. This is a function of safeguarding the users' funds. 

-Plan of internal control mechanisms: administrative tasks, risk management and accounting mechanisms. 

-Organizational structure. This refers to the branches it may have, service agents, legal entities and individuals that make life within the company. 

-Data of the persons involved in the authorized capital to operate the company. 

-Identity of the company's administrators. 

-To have an independent auditing company.

-On the day the company obtains the license it must have an operating system ready to operate. 

-Address of the registered office. 

-The main managers of the company must be in the offices located in the United Kingdom on a daily basis. 

-Security policy.

-Information on mechanisms to prevent money laundering and terrorist financing according to the regulations passed by Parliament in 2017.

Reasons to Apply for an EMI license in the UK

-Favorable environment for IT financial business. Exists. Around 401 payment institutions in the UK. In 2020 alone, 52 EMI licenses were registered with the FCA. 

-Skilled workforce. The UK is one of the world's leading financial centers. It has capable and efficient financial and IT systems firms and advisors in the field. 

-High-end infrastructure. The country has a state-of-the-art construction and telecommunications industry. 

-Since leaving the European Union, the United Kingdom has been reducing regulations and providing flexibility for start-up companies. 

Company Formation Process

The process to create your company with an EMI license has 5 steps in which MUNDO will always be advising and accompanying you. 

-Paperwork. We offer our vision and capacity to create a successful business model. 

-Company formation. We take care of the process of registering your company and opening bank accounts. 

-License application. We will gather all the necessary information for you to make a successful application for your license. 

-Coordination. We will always work together with you so that your wishes and needs are taken care of. 

-Authority decision. We will be in contact with the FCA to know the status of your application

For more detailed information on EMI fees, registration procedures, documents

requirements, please contact our experts! 

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